Thursday, May 22, 2008

Cloud Computing - Startup Opportunity?

Eric and I are watching the cloud computing phenomenon with great interest. As software entrepreneurs we are intrigued by the possibilities that cloud computing may hold for innovators. It is obvious that cloud computing is real and building momentum.

The web is littered with articles about the behemoths (Amazon, Google, IBM, MS) building city-block size data-centers, platforms, and defining new business strategies around the computing cloud. We also know that Web 2.0 companies are leveraging the low cost, quick time to market, and scalability benefits of cloud computing.

As a middleware guy, I wonder if there is or will be a market for the smaller innovator to provide applications and services within the cloud or is do the big boys already have a strangle hold on that market?

A non scientific, yet interesting way to answer that question is to examine the amount of money being put into cloud computing ventures. Venture Capitalist (VCs) make their living on being able to predict the future and align their resources accordingly. Are VCs financing non-Web 2.0 startups that provide infrastructure plays in the cloud?

I have scoured the web and have found very little information to dogmatically answer that question. We are a bit early and we are still asking question like, What is Cloud Computing? Yet, I believe there is a tremendous amount of opportunity for innovative companies to make rain in the every evolving cloud. Case in point, startup RightScale recently raised $4.5M for their resource management application.

Stepping outside the cloud for a minute, there are tremendous opportunities to help the enterprise leverage the benefits of the computing cloud. Frank Gillett, from Forrester Research suggest that a lack of security and service-level agreements are hurdles that need to be overcome before clouds are embraced by big corporations. Hurdles... that's another word for opportunity!